MacroScope

Why the BRICS like Africa

June 30, 2009

There is little doubt that the BRICs — Brazil, Russia, India and China — have become big players in Africa. According to Standard Bank of South Africa, BRIC trade with the continent has snowballed from just $16 billion in 2000 to $157 billion last year. That is a 33 percent compounded annual growth rate.

What is behind this? At one level, the BRICs, as they grow, are clearly recognising commercial and strategic opportunities in Africa. But Standard Bank reckons other, more individual, drivers are also at play.

In a new report, the bank looks at what each of the individual BRIC countries is trying to do. To whit:

– Brazil’s immediate intererest in Africa is securing access to natural resources, particularly oil. But is also motivated by a desire to create a new “Southern Axis” with itself at the forefront.

– Russia is also interested in Africa’s natural resources. But it faces a problem because of the sullied reputation of the Soviet Union during the Cold War. So Moscow has also embarked on a rebranding programme within the continent by ramping up its aid programmes.

– India is attracted to Africa in part because of long historic ties. Commercial engagement, however, is also motivated by a need to guarantee the natural resources it needs for its own growth. Furthermore Africa is seen politically as a key ally in the pursuit of a competitive advantage over its Asian competitor China.

– For China, Africa provides a long-term partner in its ongoing bid to gain global economic ascendancy, providing it with the resources, markets, geopolitical support, and, eventually, food and social security in the form of a growing and engaging diaspora.

A full copy of Standard Bank’s report, which was written by Simon Freemantle and Jeremy Stevens, can be found here.

(Photo: Jeremy Gaunt)

Comments
14 comments so far | RSS Comments RSS

Africa has been neglected by the West for ages, the bric countries see the huge potential of Africa as most of it is still uncharted territory.

 

Dear Jeremy,

The arrival of BRIC is a matter for rejoicing on the Continent. Where once the Demand side of the Equation was one sided and the West, today we exist in a new MultiPolar World and this data is the purest confirmation of that.

I have no doubt that Africa is the last Convergence Trade going. I traded Italian rates when Fazio and Italy started the process of joining the European System. Africa is a late cycle Industrial revolution that will be IT and Communications led. Just Model the number of SMSs and you will see a supernormal growth curve the like of which you have never seen before. We have past the inflexion point.

Every Player has different interests but in our World it would commercially illiterate not to be paying a great deal of attention to the Continent at this very moment.

Aly-Khan Satchu
http://www.rich.co.ke
Twitter alykhansatchu

 

These nations like Africa for the same reason Europeans did…because it is exploitable. Asia used to fill this role for most of the world. Now, its the other way around. Funny world we live in…

Posted by Patrick | Report as abusive
 

8:09 am GMT

Africa has been neglected by the West for ages, the bric countries see the huge potential of Africa as most of it is still uncharted territory.

 

There was no need to break it down between bric’s all the author needed to say was “NATURAL RESOURCES” by each Country. At the current rate of Emerging Market expansion, Africa is going to be one big mine!

Posted by cfwade99 | Report as abusive
 

The deeper you dig, the deeper the trouble you are in. It is easy to go in, but difficult to pull out. Nigerian oil is one good example.

Posted by Ernie | Report as abusive
 

Unfortunate that one of the world’s top news agencies decided to represent the modernizing societies of the African continent with a picture of two giraffes. Let us continue to perpetuate the idea that Africa is a playground of natural resources for the developed world, taking no notice of the real people real governments and real economies that exist within African nations.

Posted by Patrick | Report as abusive
 

Well said, Patrick

 

The U.S. has turned much of it’s landscape into wasteland because of mining. The ramifications of such activities to society can be devastating. Jared Diamond’s “Collpase” is an excellent chapter by chapter case study of how societies around the world through out history have failed or succeeded at avoiding complete collapse. The fates of the Anisazi, Maya, Easter Island and others are warnings to heed. The success of 17th century Germany and Japan avoiding collapse give reason for us today to be hopeful.

The bottom line is unsustainable exploitation of resources is one of the four or five major reasons societies collapse. If we rely on reason, logic and the truth, we can mitigate the coming disasters. Do we have the will? It seems senseless to do the same to Africa that we have done here in the west.

Posted by Anubis | Report as abusive
 

I’ll third what Patrick said and add that hopefully Africans can make some good deals this time. With the changing world order is the opportunity to actually prosper from their resources rather than let the East do to it what the West did to it.

 

It seems there is no country in the world which can develop without using africa as a step stone.
African ressources Built western countries and are even doing it today. It is up to African countries to make sure they get fair trade in those ressources. What hapened in the past centuries should not be continued any more.(Exploitation)
We have to recognise we have ressorces needed by others, we are the owners and a fair price for them must be paid.

Posted by peter obure | Report as abusive
 

Another scramble for Africa begins.It is infuriating that Africa continues to lie supine,while other countries rape it.The so-called BRIC countries are going to do what all those European countries did in the past;take our resources,and,once they have used up all our resources,leave.It’s quite unbelievable to me,that Africa which most likely has the most natural resources in the world,is the poorest continent in the world.India has negligible natural resources,but by developing its human capital it is now set to become an economic superpower,while Afrians continue to beg for “AID” which is just an addictive drug that our leaders can’t seem o get enough of.The moment African leaders move away from their greed,tribalism and nepotism,then the whole continent will prosper.But that will probably be in the year 3000,if then.

 

africa has the needed resourses needed by the BRIC countries..it is important that a mutual agreement be made between the trading entities. China for instance has made such developments in Sudan and other sub saharan countries

Posted by otekki | Report as abusive
 

The Devil has been dancing all over Africa for 200 years. The result has been Totalitarian, corrupt Governments of the “Strongman” variety instead of democracy or any other form of good Government except for a few Countries.

Handouts from the West have caused much more damage than if Africa had been left to it’s own devices, to develop it’s own infrastructure, agriculture and industries. Now the devil returns in the form of China. Don’t be fooled by his new disguise.

 

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